Nostalgia helps keep once-thriving restaurant franchises alive

Sunday

Mar 3, 2013 at 12:01 AMMar 3, 2013 at 3:38 PM

Rax, Arthur Treacher's Fish & Chips, York Steak House, Ponderosa Steakhouse and Damon's franchises - all but one born in central Ohio - hit their stride in the 1970s and 1980s by appealing to customers with everything from British fish and chips to big-screen televisions.

Mary Vanac, The Columbus Dispatch

During passes through Lancaster on business, Gary Ford usually stops for lunch at the Rax fast-food restaurant. Ford grew up in Indiana eating the Ohio chain’s Uncle Alligator kids’ meals and drinking from its alligator-shaped cups.

“I love Rax, too,” chimed in Ford’s lunch partner and business colleague, Sandy Carter. “I grew up on it in Columbus.”

Rax, Arthur Treacher’s Fish & Chips, York Steak House, Ponderosa Steakhouse and Damon’s franchises — all but one born in central Ohio — hit their stride in the 1970s and 1980s by appealing to customers with everything from British fish and chips to big-screen televisions.

The chains were bought and sold, often by investors who added debt and churned through managers, leaving them with tired menus and neglected restaurants, said John Gordon, restaurant analyst for Pacific Management Consulting Group in San Diego.

Today, the chains survive in small pockets in Ohio and elsewhere mostly because customers fondly remember their food.

“I really believe it’s all about loyalty,” said Bonnie Riggs, restaurant analyst for consumer and retail market research firm NPD Group. “People grew up with them, so they’re very loyal to them. That’s the staying power for these concepts.”

Rax Roast Beef

Started in Springfield in 1967, Rax peaked in the 1980s with more than 500 restaurants in three dozen states, said Rich Donohue, who owns five Rax restaurants, including three in central Ohio.

But Rax strayed from roast beef, confusing customers with offbeat menu items and driving them away with high prices. A management buyout in 1991 leveraged the company with debt.

Donohue got a management job at the Ironton Rax in 1982 after graduating from high school. He left the chain shortly after it filed for bankruptcy protection in 1992.

After a deal to buy Rax failed, the company made a second trip to bankruptcy court in 1996.

Donohue bought the Ironton Rax in 2002 when the company sold all its assets. He also owns restaurants in Lancaster, Circleville and Ashville, Ky., as well as the Rax trademark.

All 14 Rax restaurants in Ohio, Kentucky, Indiana, Illinois and West Virginia are independently owned but buy food and supplies as a group, Donohue said.

He refocused the menu on the roast beef customers remember. The BBC beef, bacon, cheddar — sandwich is a best-seller at the Lancaster location, manager Ashley Deyo said.

“I believe the product that we sell is quality,” Donohue said. “We are still doing the things the same way we did back when I first started.”

Arthur Treacher’s Fish & Chips

Dave Thomas, founder of Dublin-based Wendy’s, was among investors who launched Arthur Treacher’s Fish & Chips in Columbus in 1969. Its anchor menu item: cod fried in a proprietary batter served with British-style fries, called chips, and cornmeal hush puppies.

Unable to achieve profitability, the chain’s third owner sought federal bankruptcy protection in 1983. More investors tried to invigorate the brand in the 1990s by testing new concepts, including grilled fish, but operations continued to flag.

TruFoods, a New York company that “specializes in revitalizing great American brand names for a new generation to enjoy,” is trying again. TruFoods franchises the restaurants in a handful of states, including Ohio, which is home to about half of the chain’s 16 units. The lastColumbus-area restaurant, in Lancaster, closed late last year.Fred Kirvan, chief operating officer for TruFoods, and Gary Occhiogrosso, the company’s vice president of development, understand the power of food nostalgia. But they also want to win new generations of customers with items such as chicken and shrimp po’ boy sandwiches, and updated branding and packaging.

For Tim Hopkinson, who bought his first two Arthur Treacher’s franchises in 1984, renewed support from his franchising company might have come too late.

Hopkinson’s seven restaurants in the Youngstown area “did well” in the 1980s and 1990s, he said. But his “operating costs flew through the roof” in 2009 after a bump up in the minimum wage, said Hopkinson, who had just finished a costly store remodeling project.

He began closing the restaurants in 2011 and now is down to two stores, in Warren and Austintown. “I don’t blame Treacher’s for my problems,” he said about his franchising company. “The economics up here are still very poor. And as I get older, I don’t want to fight the battle.”

York Steak House

Elliott Grayson and Berndt Gros started York Steak House in Columbus in 1966. General Mills bought the chain in 1977.

York customers ordered their steaks, and then picked up bowls of fried onions or parfait glasses of gelatin cubes topped with whipped cream at cafeteria-style lines. The restaurants were popular during the 1970s.

“Everybody went to the mall, shopped, ate and went to a movie. That was your Friday night,” said Jay Bettin, who bought the York Steak House on W. Broad Street in 1989.

All but 10 of the nearly 200 York Steak Houses at the chain’s height were located in suburban shopping malls, said Bettin, whose location was one of the exceptions.

“We still have all the favorites: sirloin tips, honey-glazed chicken, baked fish almondine,” said Bettin, who draws nostalgic customers from as far as Massachusetts and Texas.

Ponderosa Steakhouse

Ponderosa was started in Kokomo, Ind., in 1965 and tried to grow in Canada first. Its restaurants offer steaks accompanied by a hot side dish, salad and dessert buffets.

“Columbus used to be one of our strongest markets,” said Gordon of Pacific Management Consulting, who spent a decade as a Ponderosa cost analyst in the 1980s.

Ervin and Vickie Campbell bought the Ponderosa restaurant on S. High Street in 2006. “In the heyday, I think they had eight or nine restaurants in Franklin County,” Ervin Campbell said. “This is the only one that’s left.”

Ponderosa had 650 restaurants in 1990, but it’s down to about 200 restaurants, said Gordon, who keeps tabs on his former employer.

The Campbells remodeled their store in 2007. “We’re very proud of the buffet here,” said Ervin Campbell, who employs more than 40 people.

Ponderosa discounts meals served to veterans and active military members, and is one of the rare restaurant chains that’s open on Thanksgiving and Christmas. “It’s on those days that you really feel good about what you do,” Campbell said.

Damon’s Grill

Damon’s was founded in Columbus in 1979. It grew through the 1980s and 1990s because it was on the cutting edge of the TV sports-bar concept and among the few northern chains serving ribs.

But over time, sports bars cropped up on almost every corner, and many restaurants started serving ribs.

“It was a chain that failed to evolve over the years,” said Dennis Lombardi, executive vice president of food-service strategies at WD Partners in Columbus. “And their original point of difference, which was their sports-viewing area, became dated and fundamentally noncompetitive."

Additionally, challenging economic times in the Midwest, where most Damon’s restaurants were located, cut sales at most of the stores.

In 2006, Damon’s and its 88 restaurants — down from 150 just a few years earlier — were sold to a North Carolina real-estate developer. Two years later, the concept was bought by a Pittsburgh developer. And in 2009, Damon’s, down to 90 locations, filed for bankruptcy protection.

The company is now down to 13 restaurants in Ohio and seven nearby states, according to the company’s website. The only Damon’s left in central Ohio is in Newark. Messages left at its corporate phone number in Columbus were not returned.

mvanac@dispatch.com

@maryvanac

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